Bush Campaign Chair Fabricated Job Loss Number

Racicot twisted informal study by Pennsylvania economist

June 17, 2004 | Great Lakes Bulletin News Service

MLUI

The Bush campaign, which polls show is running behind John Kerry in Michigan, has sought to turn Mr. Kerry’s proposal to raise fuel mileage standards into a political advantage for the President. But making vehicles more energy efficient would produce more jobs, say authorities.

On April 8 Marc Racicot, President George W. Bush’s national campaign chairman, startled Michigan by announcing what sounded like an ominous fact. After dedicating the Bush-Cheney campaign’s state headquarters near Detroit, Mr. Racicot said that if Democratic presidential candidate John Kerry’s proposal to raise vehicle fuel mileage standards went into effect Michigan would “lose 105,000 jobs.”

Mr. Racicot’s statement, meant to diminish Mr. Kerry’s standing in a swing state crucial to the campaigns of both candidates, was picked up by the state and national media. His comment was reported in the Detroit Free Press, TheDetroit News, ABC News, and other print, broadcast, and Internet media.

But according to an investigation by the Great Lakes Bulletin News Service, Mr. Racicot’s assertion is at best a serious misrepresentation of a Pennsylvania economist’s two-year-old study, and at worst a deliberate fabrication. It also ignores the fact that many experts believe that improving fuel mileage would actually create more jobs, not eliminate them, and that the United Auto Workers supports Mr. Kerry and does not see his proposals about fuel efficiency as a threat to its members.

The news service investigation of Mr. Racicot's statement found:

Mr. Racicot based his claim on an informal and brief economic analysis of fuel mileage standards by Andrew Kleit, associate professor of energy, environmental, and mineral economics at Pennsylvania State University, according to Merrill Smith, regional spokesperson in Washington for the Bush-Cheney Campaign.

Mr. Kleit conducted the analysis at the request of General Motors and completed it in 2002. Mr. Kleit’s paper attracted the attention of the White House and the Republican Party after it was posted to the Web site of the Competitive Enterprise Institute, a libertarian, free-market think tank based in Washington whose board and staff overwhelmingly support President Bush.

Mr. Kleit’s brief discussion, which he called “a working paper,” analyzed employment in the auto manufacturing and parts supply industry and concluded that 104,000 jobs might be lost nationwide from increasing fuel mileage standards. It was not subjected to independent analysis or peer review.

Although Mr. Racicot cited the number from the Kleit paper and said it represented potential job losses in Michigan, Mr. Kleit confirmed that his short paper did not discuss Michigan at all.

In an interview with the Great Lakes Bulletin News Service, Mr. Kleit said he was unaware that the Bush campaign was using his working draft for political purposes. When asked whether he felt that Mr. Racicot’s assertion about job losses in Michigan was an accurate portrayal of his findings, Mr. Kleit declined to respond.

A much longer, academically rigorous version of the Kleit paper was published in the April 2004 edition of Economic Inquiry, a peer-reviewed journal. That version made no mention of auto industry employment or job losses. When asked why, Mr. Kleit responded, “It’s not of particular interest to academics.”

False Fact In A Critical DebateMr. Kleit’s paper came in response to a 2002 proposal by Senator Kerry and Senator John McCain, a Republican from Arizona, to raise the federal corporate average fuel economy standards (CAFE) to 36 miles per gallon by 2015. Mr. Kerry has made that goal part of his presidential campaign.

Federal fuel mileage standards were enacted in 1975 to improve fuel economy and save energy during the mid-1970s gas crisis. CAFE standards set the minimum average gas mileage that an auto manufacturer must achieve for its entire vehicle fleet. They are credited with conserving billions of gallons of gasoline and oil.

The current standards are 27.5 miles per gallon for cars and 20.7 miles per gallon for light trucks, which include sport utility vehicles, pickups, and minivans. Although the formula is complex, Mr. Kerry’s proposal essentially represents a 50 percent increase in fuel efficiency for American vehicles, and is intended to clear the air, reduce dependency on foreign supplies of oil, and lower family fuel costs.

Daniel Lashof, senior scientist at the Natural Resources Defense Council (NRDC), said reaching Mr. Kerry’s goal would produce real benefits for the nation. “Raising the standard to 40 miles per gallon for the overall fleet would decrease our oil consumption 4 million barrels per day by 2020.”

Bush Seeks AdvantageThe Bush campaign, which polls show is running behind Mr. Kerry in Michigan, has sought to turn Mr. Kerry’s proposal into a political advantage for the president. Bush campaign officials insist that a more rigorous fuel mileage standard would force American manufacturers to stop producing most light trucks, which are now the industry’s bread and butter.

That charge is particularly sensitive here. According to the federal Bureau of Labor Statistics, Michigan auto manufacturers and parts suppliers provide 376,300 jobs to state residents. In claiming that 105,000 jobs would be lost under Mr. Kerry’s CAFE proposal, the Bush campaign asserts that 28% of automotive jobs in Michigan would cease to exist.

In recent weeks, the Bush campaign has sought to increase the numbers of jobs they say the Kerry proposal would cost Michigan. Chris Paolino, the communications director of the Michigan Republican Campaign, said in an interview that job loss estimates now actually numbered 143,000. But when asked to find an accurate study to verify that number, Mr. Paolino said, “I wish I could because it’s a better number for us.”

Mr. Paolino added, “The only way to put SUVs and light trucks on the market to conform to John Kerry’s standards would be to essentially gut them and make them traveling aluminum cans.”

Leaders of the Kerry campaign asserted that their opponents are making up numbers and using scare tactics. Kerry campaign supporters note that Ford is introducing a hybrid-electric powered small SUV this summer, the Escape, that is capable of getting more than 35 miles per gallon in city driving and is anything but an “aluminum can.”

Also, state and federal unemployment studies show that joblessness, particularly in Michigan’s manufacturing sector, has increased greatly during the Bush administration. According to the Bureau of Labor Statistics, the unemployment rate in Michigan increased from 3.5% in 2000 to 7.3% in 2003. The statewide unemployment rate for the first four months of 2004 was 7.15%. Roughly 200,000 manufacturing jobs have vanished in Michigan since Mr. Bush took office.

Kerry RespondsThe Kerry campaign is getting help from the United Auto Workers, which represents 136,574 workers in Michigan and has formally endorsed the Massachusetts senator. Paul Krell, the UAW public relations director, said, “We certainly wouldn’t endorse someone who would put the auto industry out of business.” Mr. Krell said Mr. Kerry’s CAFÉ proposal is flexible, describing his 36 miles-per-gallon standard as a goal not a mandate, a point confirmed by the Kerry campaign.

Mr. Krell’s description of Mr. Kerry’s policy stands in stark contrast to the Bush campaign description of Mr. Kerry — Mr. Racicot accused him of “environmental extremism” in April and has said that Mr. Kerry’s CAFE proposals is an all-or-nothing standard that would, if enacted, unequivocally result in job losses.

Kathy Roeder, a spokesperson for the Kerry campaign in Washington, said the Bush campaign has set out to distort their candidate’s position. She said Mr. Kerry has promised to work with the auto industry to ensure that the standards are flexible enough not to result in job loss. “The overriding philosophy here is for improvements and for the automotive manufacturers to create jobs. The number one issue to John Kerry, across the board, is how do we encourage job creation,” said Ms. Roeder.

“Racicot and other Republican officials have been trying to distort Kerry’s position on CAFE,” Mr. Krell added.

What the Bush campaign does not mention is that many authorities are convinced that higher fuel mileage standards will increase, not decrease, the demand for labor in the American auto industry. According to Dr. Lashof of the Natural Resources Defense Council, as more fuel-efficient technology develops, American vehicles will become more competitive with foreign auto companies, and more workers will be needed to integrate that technology into those vehicles, thus creating more demand for jobs.

The key to preventing job losses, says Dr. Lashof, is to give manufacturers time to conform to new mileage standards as well as offering consumers cash incentives to buy new vehicles which will initially be slightly more costly than older, less efficient models. That will take a decade or so, he said, adding that higher initial vehicle costs should be offset by fuel savings over the life of the vehicle.

Mr. Kerry has said in public statements that his fuel efficiency proposal allows manufacturers time to meet requirements and offers consumers incentives. “I mean, if $2,000 [in tax credits] doesn’t do it, let’s’ make it three,” he told the Detroit Free Press in 2003. “I don’t want people losing their jobs.”

As far as job losses are concerned, Dr. Lashof said that it is imperative that American companies become more efficient sooner, not later. “Building clean and efficient vehicles in the United States is something we should commit to in order to prevent losing jobs to European and Japanese automakers.” Dr. Lashof continued, “Cleaner and more efficient vehicles are going to be demanded by the market place increasingly over time, so it’s to the advantage of the domestic manufactures to get ahead of that game.”

Stephanie Rudolph, a student at Haverford College and managing editor of the Bi-College News, reports and writes for the Michigan Land Use Institute’s news desk. This is her first article for the Great Lakes Bulletin News Service. Reach her atstephanie@mlui.org.